# The balance sheet and income statement shown below are for pettijohn inc. note that the firm has no

The balance sheet and income statement shown below are for pettijohn inc. note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
balance sheet (millions of $) assets 2016 cash and securities$ 1,554.0
accounts receivable 9,660.0
inventories 13,440.0
total current assets $24,654.0 net plant and equipment 17,346.0 total assets$42,000.0
liabilities and equity accounts payable $7,980.0 notes payable 5,880.0 accruals 4,620.0 total current liabilities$18,480.0
long-term bonds 10,920.0
total liabilities $29,400.0 common stock 3,360.0 retained earnings 9,240.0 total common equity$12,600.0
total liabilities and equity $42,000.0 income statement (millions of$) 2016
net sales $58,800.0 operating costs except depreciation$54,978.0
depreciation $1,029.0 earnings bef int and taxes (ebit)$ 2,793.0
less interest 1,050.0
earnings before taxes (ebt) $1,743.0 taxes$ 610.1
net income $1,133.0 other data: shares outstanding (millions) 175.00 common dividends$ 509.83
int rate on notes payable & l-t bonds 6.25%
federal plus state income tax rate 35%

## This Post Has 3 Comments

1. ohgeezy says:

1) 2.7%

2) 1.33

3) 0.61

4) 4.38

Explanation:

1. What is the firm's ROA?

ROA (return on assets) = Net income/ Total Assets = $1,133/$ 42,000 = 2.7%

2. What is the firm's current ratio?

Current ratio = current asset/ current liability = $24,654/$18,480 = 1.33

3. What is the firm's quick ratio?

Quick ratio = (current asset - Inventory - prepaid expense)/ current liability

= ($24,654 - 13,440 - 0)/$18,480 = 0.61

4. What is the firm's inventory turnover ratio?

Inventory Turnover = Sales/Inventory = $58,800/$13,440 = 4.38

2. delaneymaufroy29 says:

1. Current ratio 1.33

2. Quick ratio 0.61

3. Total asset turnover 1.4

4. Inventory turnover ratio 4.38

5. Debt ratio 70.00%

6. ROA 2.7%

7. ROE 8.99%

Explanation:

1. Current ratio is calculated from formula :

Total Current Assets / Total Current Liabilities

$24,654 /$18,480 = 1.33

2. Quick ratio is calculated from formula :

(Total Current Assets - Inventory) / Total Current Liabilities

($24,654 -$13,440) / $18,480 = 0.61 3. Total Asset turnover ratio is calculated from formula : Net Sales / Average Total Assets$58,800 / $42,000 = 1.4 4. Inventory turnover ratio is calculated from formula : Cost of Goods Sold / Average Total Inventory$54,978 / $13,440 = 4.38 5. Debt ratio is calculated from formula : Total Liabilities / Total Assets$29,400 / $42,000 = 70% 6. Return on Asset ROA is calculated from formula : (Net Income / Average Total Assets ) * 100$1,133 / $42,000 = 2.7% 7. Return on Equity ROE is calculated from formula : (Net Income / Shareholder's Equity ) * 100$1,133 / $12,600 = 8.99% 3. Babebrooks9667 says: b.$2.91

Explanation:

shares outstanding 175,000,000

common dividends $509,830,000 dividends per share = total common dividends / total shares outstanding =$509,830,000 / 175,000,000 = \$2.91

Dividends per share refers to the amount of money that each stockholder received per every share that he/she owns.